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PVD [U-PF -12.8%] - A recovery is likely to be long-drawn - Update

We revise down our target price for PVD by 19% but maintain our UNDERPERFORM rating on PVD as the share price has plunged 21% since our last update report. Our view on the outlook for 2017 is more measured than before as jack-up day rates are expected to stay low even as utilization recovers. We, nevertheless, note that our rating remains highly sensitive to oil prices. A USD10/bbl increase vs our base case throughout the forecast horizon would translate into an OUTPERFORM rating.